City of Davao v. Intestate Estate of Amado Dalisay Case Digest

City of Davao v.
Estate of Amado Dalisay

G.R. No. 207791
FACTS:
The Estate of Amado Dalisay owned several properties in Davao City
(1) Lot 1, Pcs11001298, covered by Transfer Certificate of Title (TCT) No. T202211 with
Tax Declaration No. E13410484; (2) Lot 6, Pcs11001298, covered by TCT No. T202215
with Tax Declaration No. E13410488; (3) Lot 7, Pcs11001298, covered by TCT No. T202216 with Tax Declaration No. E13410489; (4) Lot 2, Pcs11001298, covered by TCT
No. T202212 with Tax Declaration No. E13410492; and (5) Building erected in Lot No.
26B and covered by Tax Declaration No. E13410480.
These properties were advertised for sale at a public auction for non-payment of real
estate taxes. No bidders appeared on the date of the public auction, thus the properties
were acquired by the City Government of Davao pursuant to Section 263 of the Local
Government Code
Section 263. Purchase of Property By the Local Government Units for Want of Bidder.
In case there is no bidder for the real property advertised for sale as provided herein,
the real property tax and the related interest and costs of sale, the local treasurer
conducting the sale shall purchase the property in behalf of the local government unit
Within one (1) year from the date of such forfeiture, the taxpayer or any of his
representative, may redeem the property by paying to the local treasurer the full amount
of the real property tax and the related interest and the costs of sale. If the property is
not redeemed as provided herein, the ownership thereof shall be vested on the local
government unit concerned.
The Declaration of Forfeiture was issued by the City Treasurer when the delinquent
taxpayer did not use the one year period to redeem the property. The City caused the
annotation of the 5 Declarations of Forfeiture on the TCTs of the properties.
Subsequently the respondent estate inquired to the City Treasurer the amount of the
redemption price and it showed an aggregate total of 4,996,534.67 PHP
The Estate delivered a written tender of payment of the redemption price. However the
petition refused to accept it which prompted the Estate to consign the amount to the
RTC. An action for redemption was then initiated by the respondent against petitioner.
RTCruled in favor of respondent
CAaffirmed decision of the RTC. The City has been remiss in its duty to immediately
issue the Declaration of Forefieture within 2 days from purchase of the property as
mandated by Section 263 of the LGC.
ISSUE:
W/N the 1 year redemption period of forfeited tax delinquent properties purchased by
the local government for want of a bidder is reckoned from the date of the auction or
sale or from the date of issuance of the declaration of forfeiture
HELD:
A valid redemption of property must be based on law which is the very source of this
righr. It is necessary that compliance with the rules set forth by law and jurisprudence
should be shown in order to render validity to the exercise of this right.
The right acquired by the purchaser at an execution sale is inchoate and does not
become absolute until after the expiration of the redemption period without the right of
redemption having been exercised.
Section 263 of the LGC lacks the definiteness as to the reckoning point for the
redemption of tax delinquent properties. It merely employees the phrase within 1 year
from the date of such forfeiture. The City avers that the period commences from the
date of forfeituredate of auction. The Estate insists that the redemption period begins
from the date when the declarations of forfeiture were issued.
However the argument of Petitioner City point toward a more just a fair resolution of the
vagueness of the law.
(1) Forfeiture: refers to the date when the tax delinquent properties were sold at public
auction. Section 263 of the LGC takes into effect when there is an absence of a bidder
in a public auction for tax delinquent properties. The absence of public impels the City
Treasurer to purchase such property in behalf of the city. Reason would dictate that this
purchase by the city is the forfeiture mandated by law. The forfeiture is the situation
where the local government ipso facto forfeits the property for want of a bidder. This
happens on the date of the sale and not upon the issuance of the declaration of
forfeiture. If the court were to rule otherwise then the right of the local government to
purchase would be from the time of declaration of forfeiturewhich is absurd.
(2) In the case of City Mayor v. RCBC, even though it involved Section 261 of the LGC, it
passed upon the reckoning period of the redemption period for auction tax delinquent
properties. The court ruled pursuant to the amendments made by RA 7160 to PD No.
464, the owner of the delinquent real property or person having legal interest or his
representative has right to redeem the property within 1 year from the date of sale upon
payment of the delinquent tax and other fees. The period of redemption of tax
delinquent properties should be counted not from the date of registration BUT the DATE
OF SALE OF THE TAX DELINQUENT PROPERTY as provided by Section 261 of RA
7160.
Considering the fact that neither parties invokes the externes of an ordinance of similar
import, the general law would apply. The usage of the term sale and forfeiture in RA
7160 is connoted as the point in time when the owner is divested of certain attributes of
ownership over the property albeit only until the redemption of the property. This
translates to no other event but to the date of the public auction.
(3) Regarding the belated issuance of the Declarations of Forfeiture, the general rule is
that the State cannot be put in estoppel by the mistakes or errors of its officials or
agents. However, it may only apply in special cases where the interest of justice clearly
require it. The delay on the part of the Estate to at least inquire into the outcome of the
auction and its misplaced reliance on a curious document heightens the belief of the
Court that the City may not be deprived of a right that has long been vested in its favor.
This hinders the Court from applying the exceptions to the rule on estoppel, when doing
this would result in more impropriety. It is the City that would suffer an injustice if it were
to be bound by its officers suspect actions. The policy of enabling local governments to
fully utilize the income potentialities of the real property tax would be put at a losing end
if tax delinquent properties could be recovered by the sheer expediency of a document
erroneously or, perhaps fraudulently, issued by its officers
The failure of the Estate to validly exercise its right of redemption within the statutory
period had already resulted in the consolidation of ownership over the properties by the
City.

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